Store returns are becoming a bigger hassle

Jennifer Howe is still holding onto gifts from Christmas she doesn't want. Slippers that are too big, a designer perfume she'll never wear, and candles.

“They look nice, but I’ve never been a candle person," she said. “I’m thinking about donating some of the stuff I got, or maybe re-gifting, since returning is a pain.”

She's not wrong. Retailers now are making returns more challenging, more confusing, and potentially more expensive. What a difference a couple of years make.

During the pandemic, retailers bent over backwards to make returns simple — and seamless — for homebound Americans. After all, retailers wanted shoppers to keep spending during what was an extremely uncertain time.

Now given the healthier retail environment combined with other factors (namely the higher costs of doing business), retailers are cracking down.

In fact, according to goTRG, a logistics company focused on returns, 6 in 10 retailers changed their returns policies in the last year alone.

Among the changes: shorter refund and return windows, shipping fees, restocking fees, and other surprises, said Shender Shamiss, president and CEO of goTRG.

Consumers like Nick Mueller are finding that out the hard way.

“I recently tried to return an article of clothing from REI, and was surprised to find out there was a $6 charge,” Mueller said.

“Returns have just gotten too costly and retailers are trying to protect their margins,” said George Trantas, Sr., director of global marketplaces at Avalara, a leading provider of cloud-based tax compliance automation for businesses of all sizes.

“The cost of returns could be upwards of $30 per item. You’ve got the outbound shipping costs, plus labor costs, plus return shipping, plus the labor costs of putting the item back on shelves and then the first markdown,” he said. “How can retailers recoup that original price? They can’t.”

Shamiss concurs.

“The process of shipping an item back can take away as much as 85% of the value,” Shamiss said.